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Wake up GOP: Smashing system doesn't fix it

By David Frum, CNN Contributor
  • David Frum, a Republican, says conservatives shouldn't act like student radicals
  • He says GOP dug in on spending cuts and no new taxes, but most Republicans don't buy that
  • He says jobs should be first concern, then let economy recover before fixing deficit
  • Frum: GOP so pessimistic, panic-stricken that it was willing to rush into catastrophe

Editor's note: David Frum writes a weekly column for A special assistant to President George W. Bush from 2001 to 2002, he is the author of six books, including "Comeback: Conservatism That Can Win Again," and is the editor of FrumForum.

(CNN) -- I'm a Republican. Always have been. I believe in free markets, low taxes, reasonable regulation and limited government. But as I look back at the weeks of rancor leading up to Sunday night's last-minute budget deal, I see some things I don't believe in:

Forcing the United States to the verge of default.

Shrugging off the needs and concerns of millions of unemployed.

Protecting every single loophole, giveaway and boondoggle in the tax code as a matter of fundamental conservative principle.

Massive government budget cuts in the midst of the worst recession since World War II.

I am not alone.

Only about one-third of Republicans agree that cutting government spending should be the country's top priority. Only about one-quarter of Republicans insist the budget be balanced without any tax increases.

Yet that one-third and that one-quarter have come to dominate my party. That one-third and that one-quarter forced a debt standoff that could have ended in default and a second Great Recession. That one-third and that one-quarter have effectively written the "no new taxes pledge" into national law.

There was another way. There still is.

Give me a hammer and a church-house door, and I'd post these theses for modern Republicans:

1) Unemployment is a more urgent problem than debt.

The U.S. can borrow money for 10 years at less than 3%. It can borrow money for two years at less than one-half a percent. Yes, the burden of debt is worrying. Yet lenders seem undaunted by those worries.

Meanwhile, more than 14 million Americans are out of work, more than 6 million for longer than six months. The United States has not seen so many people out of work for so long since the 1930s.

2) The deficit is a symptom of America's economic problems, not a cause.

When the economy slumps, government revenues decline and government spending surges.

Federal revenues have collapsed since 2007, down from more than 18% of national income to a little more than 14%. To put that in perspective: That's the equivalent of losing enough revenue to support the entire defense budget.

Federal spending has jumped to pay for unemployment insurance, food stamps and Medicaid benefits.

Fix the economy first, and the deficit will improve on its own.

Cut the deficit first, and the economy will get even sicker.

3) The time to cut is after the economy recovers.

Businesses are hoarding cash. Consumers are repaying debt. State and local governments are slashing jobs. (Since 2009, the number of Americans working for government has shrunk by half a million, the biggest reduction in civilian government employment since the Great Depression.) Right now, there's only one big customer out there: the federal government. How does it help anybody if the feds suddenly stop buying things and paying people?

4) The place to cut is health care, not assistance to the unemployed and poor.

The United States provides less assistance to the unemployed and the poor than almost any other democracy. It spends 60% more per person on health care than almost any other democracy -- and gets worse results. The problem is not that Americans use too much medicine. People in other countries use more. The problem is that Americans pay too much for the medicine they use. Go where the money is, cut where the waste is grossest.

5) We can collect more revenue without raising tax rates.

Republicans stand for low taxes to encourage people to work, save and invest. But how would it discourage work if we reduced the mortgage-interest deduction again? Did it hurt the economy when we reduced the maximum eligible loan to $1 million back in 1986? Do Canadians and Brits -- who lack the deduction -- work less hard than Americans?

Why are state and local taxes deductible from federally taxable income? Wouldn't higher taxes on energy encourage conservation? Who decided to allow inflation to corrode federal alcohol taxes by 80% over the past 50 years?

6) Passion does not substitute for judgment.

Republicans and conservatives have worked themselves into a frenzy of rage and contempt for President Barack Obama. House Speaker John Boehner's post-deal PowerPoint for Republican House members was actually labeled "Two Step Approach to Hold President Obama Accountable" (PDF) -- as if the supreme goal of policy in this time of economic hardship were to fix the blame for all problems on the president. This exercise in finger-pointing satisfies the emotions of the Republican base. It does not accurately explain the causes of the crisis or offer plausible remedies.

7) You can't save the system by destroying the system.

In their passion, Republicans convinced themselves that the constitutional republic and the free-enterprise system were threatened as never before. Their response? To threaten to blow up the free-enterprise system and wreck the republic unless they gained their point.

Republicans have become so gripped by pessimism and panic that they feel they have nothing to lose by rushing into a catastrophe now. But there is a lot to lose, and in these past weeks America nearly lost it. Let's hope that as America steps back from the brink, Republicans remember that it's their job to protect the system, not to smash the system in hopes of building something better from the ruins.

That's how student radicals think -- not conservatives.

The opinions expressed in this commentary are solely those of David Frum.